The Policy Targets Agreement, effective immediately, is the same as that signed by Mr Spencer and the previous Finance Minister Steven Joyce, which has been in effect since Mr Spencer’s six-month term as Governor began on 27 September.

The PTA requires the Reserve Bank to keep future CPI inflation outcomes between 1 per cent and 3 per cent on average over the medium term, with a focus on keeping future average inflation near the 2 percent target midpoint.

“The renewed PTA will continue to provide continuity, consistency and stability for the monetary policy target during the period of review of the monetary policy provisions of the Reserve Bank Act, and ahead of the appointment of a new Governor,” Mr Spencer said

Mr Spencer said that the Bank welcomes the Review of the Reserve Bank Act and will work with the Treasury on the Review.

“The Reserve Bank has been subject to several reviews in the past. The Terms of Reference state that the operational independence of the Reserve Bank remains paramount and will be protected,” he said.

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